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Barbados Today

Published on
September 22, 2017

A regional economist is warning Barbadians to brace for more hardships given the likelihood that Government will miss its fiscal targets and that the island’s overall economic performance will be weaker than expected this year.

Marla Dukharan issued the grim assessment in response to the latest country risk report prepared on Barbados by the United States-based global insurance credit ratings and information services firm A.M. Best.

The report, which was issued last month, suggested that the country was now at tier four (CRT-4) in terms of its level of economic and financial risk, just one stage away from the highest category with a “relatively unpredictable and nontransparent political, legal, and business environment . . . underdeveloped capital markets [and] partially to fully inadequate regulatory structure”.

Marla Dukharan

While suggesting that the country was now on par with Trinidad and Tobago and Antigua and Barbuda, the report highlighted several challenges, including Government’s high debt burden, the country’s ability to maintain its currency peg to the US dollar, its high dependency on tourism, low foreign reserves, as well as the Central Bank’s continued financing of Government.

Dukharan, who is the chief economist at the Barbados-based financial technology company Bitt.com, told Barbados TODAY she agreed that those areas required urgent attention, but stressed that any decision taken must“safeguard the most vulnerable”.

However, while Minister of Finance Chris Sinckler’s May 30 presentation of a $542 million fiscal adjustment package was aimed at erasing the country’s deficit, which currently stands at around six per cent, the economist said she had very little confidence that this would happen.

“With the corresponding monetary tightening, it is difficult to envision how an adjustment of this magnitude, if fully executed, will only reduce growth by 0.5 per cent. As such, I expect growth and fiscal revenues to be weaker than expected, and as a result, the fiscal (surplus) target is likely to be missed again,” she said.

Though hopeful that Government could still realize a surplus for the current fiscal year ending March 2018, as Sinckler has projected, she said: “I am not very confident that it will, given the years of missed deficit targets, which perhaps indicate a significant implementation deficit, over-ambitious targets, and unrealistic assumptions.”

Besides Government’s high debt burden, which is over 140 per cent of GDP, the regional economist said another concern was that of exchange rate stability.

“The level of reserves is well below the precautionary benchmark of 12 weeks, at roughly nine weeks by my estimate. This level of external vulnerability could potentially affect everyone across the board, because on average, 80-90 per cent of what we consume is imported. But a balance of payments crisis, again, could affect the most vulnerable more acutely, as it demands austerity-heavy reforms as a remedy, which will affect those at the margins relatively more significantly,” she added.

He said the country’s falling international reserves were but one example of the deteriorating conditions, which were an indication of the increased risk.

At the end of June the reserves plummeted to $635.5 million or just 9.7 weeks of import cover, down from the already low 10.7 weeks of import or $705.4 million at the end of March. The international benchmark is 12 weeks of cover.

In addition, Forte said some missed targets, including the pending sale of the Barbados National Terminal Company Limited and delay in some foreign direct investment projects, were contributing to the mounting risks.

“Those things have not happened. So it is quite possible that at the end of the year that declining trend may very well continue, and that lends itself to increasing risks in terms of the country’s risk profile,” Forte said, warning that each year the fiscal deficit remained high and its debt continued to grow the country’s risk profile worsened.

“Of course the silver lining is that the economy has been growing. It has grown last year and so for this year it is growing in the region of two per cent. Tourism has been performing well . . . that is one of the bright sparks,” said Forte.

104 thoughts on “Bajans urged to brace for more hardships”

@Annette Hurdle; Why is it a big problem when persons that will tell barbadians the truth about the struggling economy? You would rather believe the politicians that will tell you how good the economy is doing and how bad America is doing that now has an unemployment rate at 4% and Barbados is 15% or higher. Can`t buy buses, garbage trucks, can`t fix the roads, people can`t get their tax returns for the last 3 years, Civil servants have not had a raise in 10 years, any person with half of a brain would need someone to tell them Barbados economy is in bad shape? Annette, to live in denial is too bad, go on line and read about for yourself.

Another yard fowl on line.Can’t wait to hear what people like you and your associate paling cocks have to say when all a DEM get kick out next year.
That will be the time Barbadians will be FOCUSING on their own.
If that woman had said that Bdos is doing well and that REAL growth would DEFINITELY be above 5 % by the end of the year,people like you would have been grinning from ear to ear like cheshire cats…but every body else knows otherwise.

@Annette Hurdle; Why is it a big problem when persons that will tell barbadians the truth about the struggling economy? You would rather believe the politicians that will tell you how good the economy is doing and how bad America is doing that now has an unemployment rate at 4% and Barbados is 15% or higher. Can`t buy buses, garbage trucks, can`t fix the roads, people can`t get their tax returns for the last 3 years, Civil servants have not had a raise in 10 years, any person with half of a brain would need someone to tell them Barbados economy is in bad shape? Annette, to live in denial is too bad, go on line and read about for yourself.

Another yard fowl on line.Can’t wait to hear what people like you and your associate paling cocks have to say when all a DEM get kick out next year.
That will be the time Barbadians will be FOCUSING on their own.
If that woman had said that Bdos is doing well and that REAL growth would DEFINITELY be above 5 % by the end of the year,people like you would have been grinning from ear to ear like cheshire cats…but every body else knows otherwise.

It’s also the politicians getting big raises every year, and still get free cars, free living arrangements, and huge financial incentives, while they tax people for food. Some people live over seas and save up their money to help out family members in barbados, but you can’t just look at people buying things. You don’t know how long they were saving to buy these things.

It’s also the politicians getting big raises every year, and still get free cars, free living arrangements, and huge financial incentives, while they tax people for food. Some people live over seas and save up their money to help out family members in barbados, but you can’t just look at people buying things. You don’t know how long they were saving to buy these things.

Seagull to answer your question, it could be like barbados sell food items to other countries such as hot sauce, sugar cane, tamberines, ackees, items such as these, sometime I see these items in the carribbean food market in the US.

Seagull to answer your question, it could be like barbados sell food items to other countries such as hot sauce, sugar cane, tamberines, ackees, items such as these, sometime I see these items in the carribbean food market in the US.

Stupse so all she could do everytime she open she mout is to preach depressions and hardships. Lady we Bajans know wha de tea leaves saying so just stop. Save your self and run away or is it you part of the elite who hood winking the vulnerable and profiting. Or are you here to whip up frenzy to cause unrest just stop already.

Stupse so all she could do everytime she open she mout is to preach depressions and hardships. Lady we Bajans know wha de tea leaves saying so just stop. Save your self and run away or is it you part of the elite who hood winking the vulnerable and profiting. Or are you here to whip up frenzy to cause unrest just stop already.

Is that man really in jail? he said on one of the call-in programs how many containers he have in the port, millions of dollar he has invested already and when asked if he has the all clear to start the project he said that he talk to a couple of the fellas, (fellas is my way of wording it.)

Is that man really in jail? he said on one of the call-in programs how many containers he have in the port, millions of dollar he has invested already and when asked if he has the all clear to start the project he said that he talk to a couple of the fellas, (fellas is my way of wording it.)

@Mark My Word; The Lady don’t have to live in Barbados to say what she said when the world knows that Barbados economy is in deep trouble and weather she or who ever else say it, it will be what it is. You`ll are living a lie and in denial. You would rather hear how good Barbados is doing from the PM and the MOFailure, when they know within themselves it is not so and for 10 years can only tax the life out of the same people over and over, other Caribbean people are just as educated as the bajan, so don`t be fooled, step out of Barbados and see for yourself.

Greece economy is in deep trouble, Dominica economy in shambles, Trinidad economy in trouble, Italy economy in deep trouble, The US economy is in a lot of trouble, The UK economy is in deep trouble, South Africa economy is in real trouble, Poland’s economy in trouble, Mexico, Pakistan, Ukraine, Venezuela, Argentina, Latvia, Croatia, Kazakhstan, Vietnam, Belarus all dem economy in deep trouble and it is the Big head Economist like Marla that got all over the world in Economic termoil so hcalndre what is your point again, are you also been paid to try to destabalize, intimidate or terrorize. tell thee gal go help T&T we will vote out or keep thee Dems one way or the other don’t need out side help.

@Mark My Word; You know that the economy of all those countries are in trouble, even the US,. now you want to shut up anyone that says Barbados` economy is in bad shape, a person that can`t spell economy would know that and the Lady is telling it as she sees it, you would rather hear about light at the tunnel but the train seems not to make it to the station or Good Friday has gone and still no Easter as yet and that will make you feel good. Living in denial is the worse thing a person could do.

Marla Dukharan needs to stop meddling in the affairs of Barbados
Meddling: To interfere in or busy oneself unduly with something that is not one’s concern.
“I don’t want you meddling in our affairs”
Go give your so called expert advice to the Trinidad Government they need your advice, that’s why they educated you, not to be a regional economic terrorist.
Terrorist: A person who uses unlawful violence or intimidation, especially against civilians, in the pursuit of political aims.
Tom Adams would of done got you pack back to Trinidad ask Ralph Gonsalves PM of St.Vincent.
We can fix our problems we are Educated and have common sense
The ballot box is how we do our thing here don’t need Aliens meddling.
Run way gal. Ah who paying you.

@Mark My Word; The Lady don’t have to live in Barbados to say what she said when the world knows that Barbados economy is in deep trouble and weather she or who ever else say it, it will be what it is. You`ll are living a lie and in denial. You would rather hear how good Barbados is doing from the PM and the MOFailure, when they know within themselves it is not so and for 10 years can only tax the life out of the same people over and over, other Caribbean people are just as educated as the bajan, so don`t be fooled, step out of Barbados and see for yourself.

Greece economy is in deep trouble, Dominica economy in shambles, Trinidad economy in trouble, Italy economy in deep trouble, The US economy is in a lot of trouble, The UK economy is in deep trouble, South Africa economy is in real trouble, Poland’s economy in trouble, Mexico, Pakistan, Ukraine, Venezuela, Argentina, Latvia, Croatia, Kazakhstan, Vietnam, Belarus all dem economy in deep trouble and it is the Big head Economist like Marla that got all over the world in Economic termoil so hcalndre what is your point again, are you also been paid to try to destabalize, intimidate or terrorize. tell thee gal go help T&T we will vote out or keep thee Dems one way or the other don’t need out side help.

@Mark My Word; You know that the economy of all those countries are in trouble, even the US,. now you want to shut up anyone that says Barbados` economy is in bad shape, a person that can`t spell economy would know that and the Lady is telling it as she sees it, you would rather hear about light at the tunnel but the train seems not to make it to the station or Good Friday has gone and still no Easter as yet and that will make you feel good. Living in denial is the worse thing a person could do.

It is unfair to say Ms. Dukharan is about doom and gloom. She is looking at the data and doing an analysis. You may not like what she says, but the truth is what it is.
I have no brief for the economist, but what concerns me is the partisan comments where people continually ignore facts and twist statements to suit themselves. At the end of the day you are not fooling anyone else but yourself.
By the way, Government ministers and the PM has been saying that unemployment is now down to 9% – not 15% as stated.
Equally, Ms. Dukharan is not the only noted economist that has stated the Barbados economy is in problems. Several Barbadians including Dr. Courtney Blackman, Charlie Skeete, Professor Michael Howard and others have expressed dismay over the economy and called for action similar to what Ms. Dukharan has suggested.
So come on people, try to raise the level of discussion.

It is unfair to say Ms. Dukharan is about doom and gloom. She is looking at the data and doing an analysis. You may not like what she says, but the truth is what it is.
I have no brief for the economist, but what concerns me is the partisan comments where people continually ignore facts and twist statements to suit themselves. At the end of the day you are not fooling anyone else but yourself.
By the way, Government ministers and the PM has been saying that unemployment is now down to 9% – not 15% as stated.
Equally, Ms. Dukharan is not the only noted economist that has stated the Barbados economy is in problems. Several Barbadians including Dr. Courtney Blackman, Charlie Skeete, Professor Michael Howard and others have expressed dismay over the economy and called for action similar to what Ms. Dukharan has suggested.
So come on people, try to raise the level of discussion.

The path out of this mess was laid out some time ago. Control your spending, cut the payroll, implement good value projects in a timely fashion, take some pay cuts, allow the people to have some money to spend and therefore get the tax dollars. But instead live like kings whilst the country suffers, travel with ridiculous amounts of staff.

The path out of this mess was laid out some time ago. Control your spending, cut the payroll, implement good value projects in a timely fashion, take some pay cuts, allow the people to have some money to spend and therefore get the tax dollars. But instead live like kings whilst the country suffers, travel with ridiculous amounts of staff.